Court Quashes Assessment Orders Violating Natural Justice & IT Act, Emphasizes Right to Personal Hearing

The court found the assessment orders to be violative of natural justice and Section 144B(7)(vii) of the Income Tax Act. It held that the availability of an appellate remedy does not bar the maintainability of a writ petition in cases of natural justice violations. Consequently, the court quashed the assessment orders, demand notices, and penalty notices, remanding the matters back to the Respondents for fresh orders in compliance with the law, ensuring a personal hearing for the petitioner. The judgment emphasized the mandatory nature of providing a personal hearing to the assessee in assessment proceedings.

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Issues:
Challenging assessment orders under Income Tax Act, violation of natural justice, maintainability of writ petitions due to alternative remedy, interpretation of Section 144B(7)(vii) regarding personal hearing requirement.

Analysis:
The petitioner filed writ petitions challenging assessment orders and penalty notices under the Income Tax Act for the Assessment Years 2014-15 to 2017-18, alleging a lack of natural justice and violation of Section 144B. The petitioner contended that no opportunity of hearing was granted despite a specific request under Section 144B(vii). The court noted the reliance on previous decisions like Sanjay Aggarwal vs. National Faceless Assessment Centre and Bharat Aluminum Company Ltd v. Union of India, emphasizing the importance of natural justice in such matters.

The respondents argued that the writ petitions were not maintainable as the petitioner had an alternative remedy through appeal. However, the court, after hearing both parties, held that the issue was no longer res integra. Referring to the case of Bharat Aluminium Company Ltd. vs. Union of India, the court clarified that the discretion under Section 144B(7)(vii) should be construed as a command when civil consequences are involved. The court emphasized the mandatory nature of providing a reasonable opportunity for a personal hearing to the assessee.

Consequently, the court found the assessment orders to be violative of natural justice and Section 144B(7)(vii) of the Act. The court reiterated the principle that the availability of an appellate remedy does not bar the maintainability of a writ petition in cases of natural justice violations. Therefore, the court quashed the assessment orders, demand notices, and penalty notices, remanding the matters back to the Respondents for fresh orders in compliance with the law, ensuring a personal hearing for the petitioner.

In conclusion, the court disposed of the writ petitions and applications, leaving the rights and contentions of all parties open for further proceedings. The judgment highlighted the significance of natural justice and the mandatory nature of providing a personal hearing to the assessee in assessment proceedings under the Income Tax Act.

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